Higher rate Road Tax

akkers

I have read in newspapers that cars registered after 1st March 2017 and costing £40,000 or higher (list price) attract a higher rate of road tax - £320 extra on top of standard rate. This to applyin years 2 to 6.


I have read elsewhere that the higher rate kicks in the 2nd time you tax the vehicle.


Now there is a vehicle that is in this bracket, was registered April 2018 and taxed for 6 months. However, after 6 months it was declared off-road. Now that it is being brought back on-road and will be taxed this month (January 2019). What will be the tax rate? Will it be the standard 1st year rate or the higher 2nd year?

AdrianC

The official wording is "first tax payment when you register the vehicle" - and that was in April. So this time, it doesn't apply.



https://www.gov.uk/vehicle-tax-rate-tables


The same applies to anything sold within the first six months or year, because that first payment is refunded when the keeper changes, whether they got SORNed or spent time "in trade" or just went straight from keeper to keeper with no break in tax.



But you're confused on the difference between the first and subsequent taxings. The £40k-list premium applies for all taxings within five years of the original registration date. The difference between first and subsequent is that the first is CO2-dependent, the subsequent are £140(+£310 if £40k+) flat rate.

akkers

Thanks for that; it makes it clear.


Funny that if you get a 6 months tax first time around then 2nd time you are going to get hit even though you are still in first year.


IMO this is all scandalous. Why not charge the higher rate to the first time buyer as he can, prsumbly, afford it. Then reduce in subsequent years. As they do it now, there are thousands of nearly new cars lying on forecourts as their market has been killed off. People buying cheaper used cars are put off by this high tax.

AdrianC

akkers wrote: »

Funny that if you get a 6 months tax first time around then 2nd time you are going to get hit even though you are still in first year.

Yes, low-CO2 prereg cars do end up paying more in tax in the first year. But it still pales compared to the amount lost in depreciation by that preregistration.

IMO this is all scandalous. Why not charge the higher rate to the first time buyer as he can, prsumbly, afford it.

I'm not sure that pointing to <5yo £40k+-when-new cars and saying "But think of the poor people!" is going to get you very far, tbh.

As they do it now, there are thousands of nearly new cars lying on forecourts as their market has been killed off.

Why? It's £310/year on cars <5yo and £40k+ new list price. £1,550 total over five years. That's all. And it applies to EVERY £40k+ list new car, and doesn't apply at all to any sub-£40k new car.

People buying cheaper used cars are put off by this high tax.

You really are going to have to explain that to me...


Look, before the 2017 VED change, the average new car in the UK had dropped to £30/year VED. Clearly, that's totally unsustainable without increasing taxation elsewhere. The last time new cars were £30 VED was 1974 - and that doesn't even take 40+ years of inflation into account.

If you want to point to relatively high VED, and claim some kind of social iniquity because of poor people, then perhaps you would be better looking at 1550cc+ pre-2001 non-historic cars. £255/year.

akkers

No you got the figures wrong I think. Talking about cars that had a list price of £40k or more:


In the first year you pay around £205.


In year 2-6 you pay standard tax (around £140)+ an extra charge £330. This amounts to £470 per year which means over years it amounts to £2350 for years 2-6.


I am not crying as such but I am just making a statement that people who buy used cars are not as well off as the ones who buy new £40k cars. But still we live in rip-off Britain.


I agree the £30/yr tax band was a bit of a joke.

AdrianC

akkers wrote: »

No you got the figures wrong I think. Talking about cars that had a list price of £40k or more:

In the first year you pay around £205.

For a car that's 131-140g/km CO2, yes. Plus £310 if it's £40k+

In year 2-6 you pay standard tax (around £140)+ an extra charge £330. This amounts to £470 per year which means over years it amounts to £2350 for years 2-6.

Offset that £140 against the £205 charged in the first year - and it's a saving of £65/year to put against the £1,550 for 5 x £310.

Let's go back a step. There are two aspects to VED now...
1. CO2. First tax = CO2, subsequent = £140.
2. List price. First five years for £40k+ = £310.

Don't conflate the two, they are completely separate.

I am not crying as such but I am just making a statement that people who buy used cars are not as well off as the ones who buy new £40k cars.

Umm, we're talking about people who are buying <5yo used £40k+ cars. Not people buying generic Corsas and the like.